Tuesday, August 16, 2016

Industrial Production & CPI

Well I guess it's considered common knowledge that we don't make anything here anymore(not true). Either way today we received some good Industrial Production numbers. The latest data shows IP up 0.7% which is the highest increase since November 2014. IP was having a rough stretch as manufacturers dealt with a stronger dollar, which at one point was increasing quite quickly. It appears that strain has abated for now. Below is a chart correlating the USD to IP. While the connection isn't always strong, you can notice the correlation where production falls after the Dollar gains strength. It looks like producers figure out how to handle the change, and business continues.

Next we received CPI. Overall inflation was flat coming in with a 0% gain. Excluding Food and Energy prices are up 0.08% in the last year. Or phrased differently food and energy prices are putting downward pressure on overall consumer prices.
 

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